Mahindra Logistics Ltd Management Discussions

km so far, resulting in a reduction of CO2

over 3,000 tonnes.

We developed our own customised technology systems to deliver innovative and cost-effective solutions, thereby improving transparency and visibility for our clients. Harnessing our deep understanding of customer needs across diverse markets, we tailored solution designs and processes to meet the complex requirements of our clients supply chains. With our offerings spanning various sectors, we emerged as a one-stop-shop for our clients, proficient in designing, executing, improving, and optimising logistics activities throughout the value chain.

Our Mobility business delivers end-to-end transport solutions in both B2B and B2C segments. In the B2B realm, our services are offered across India to more than 200 clients in a wide range of sectors, including Information Technology (IT), Information Technology-enabled Services (ITeS), business process outsourcing, financial services, consulting, e-commerce, telecom and manufacturing industries. Additionally, we extend integrated suite of services, right from rostering to billing, tailored to meet multiple contractual and vehicle requirements as per customers needs. In the B2C realm, our services are offered across four major airports in India under the Meru brand. We provide assured rides through dedicated booking counters at airports, offering kerbside pickup and well-maintained cars with trained and groomed chauffeurs.

Our services are offered through a diverse fleet, incorporating sedans, sports utility vehicles, buses, and tempo travellers, operated by a large network of over 500 business associates across more than 25 cities. We also offer services through owned EV fleet in selected cities, catering both B2B and B2C domains.

We offer fully integrated technology services such as application-based interactions for route planning and optimisation, round-the-clock control tower operations (CTO) for tracking vehicles and passengers, and EV telematics. We continue to strengthen our focus on safety, hygiene, and compliance to create differentiation in our offering. In line with this strategic approach, we initiated a host of endeavours, including multi-level safety and compliance checks, safety trainings, rewarding and recognising our employees and drivers to cultivate a culture of safety, as well as detailed incident analysis and reporting protocols, among others.

Our 99.05% subsidiary, provides international freight forwarding services for exports and imports, customs brokerage operations, project cargo services and air charters. With an established global network of agents spanning China, South Korea, Southeast Asia and Western Europe, Lords is renowned for its capabilities in providing end-to-end cross-border services. The services encompass freight movement through ocean and air, custom clearance, transportation to transit warehouses and mother warehouses.

Our Joint Venture with IVC, provides logistics and transportation services to original equipment manufacturers (OEMs). The Companys offerings enable the OEMs to carry finished automobiles from the manufacturing/assembly locations to stockyards or directly to the distributors through specially designed vehicles. Additionally, it owns and operates over 150 vehicle carriers, with MLL being its primary customer.

MLL Express Services Private Limited (formerly known as Meru Travel Solutions Private Limited) is a wholly owned subsidiary of MLL. It provides B2B express logistics services under the brand name ‘Rivigo by Mahindra Logistics. With a pan-India network of operations, the Company currently covers over 19,000 pincodes across the nation.

V-Link Freight Services Private Limited is a wholly owned subsidiary of MLL, based out of India with a branch office in Dubai. It offers supply chain management activities starting with Air Charter business in Dubai. This subsidiary is helping MLL to establish international presence and unlock next phase of growth.

MLL Mobility Private Limited (formerly known as Meru Mobility Tech Private Limited) is a wholly owned subsidiary of MLL. Involved in the business of providing B2C transportation services and corporate transportation solutions, the Company serves a wide spectrum of sectors, including BPOs, Banking, IT, and ITES in ride hail segment. MLL Mobility also boasts a fleet of over 120 EVs.

ZipZap Logistics Private Limited (Whizzard) is a tech-enabled last-mile delivery logistics Company, operating through an intracity distribution network to extend digital commerce and last-mile delivery services. MLL acquired a 36% stake in Whizzard on 8 April 2022. Pursuant to the Share Purchase Agreement, we raised our stake in Whizzard to 60% during the year under review, subsequently turning Whizzard into a subsidiary of MLL with effect from 22 December 2023.

The global economy demonstrated outstanding resilience in navigating supply chain disruptions and economic challenges in 2023-24 despite major geopolitical volatilities, stemming from events such as the Russia-Ukraine conflict, the Red Sea crisis and heightened tensions between Israel-Palestine. The projected world trade growth for 2025 stands at 3.6%, below the historical average of 4.9%, owing to ongoing trade distortions and geo-economic fragmentation. Escalating geopolitical tensions, coupled with extreme weather events, continue to be the major risks affecting the momentum of growth. Moreover, tough financial conditions also factor in as risks to global trade and industrial production. However, a significant realignment in trade flows across regions presents a strategic opportunity for India, potentially boosting its economic growth.

3.1% is the Projected Global Economic Growth for 2024, According to the IMF.

According to IMF, global economic growth is projected at 3.1% in 2024, while marginally moving up to register 3.2% in 2025. Despite an anticipation of strong resilience in the US and several large emerging markets, the forecast for 2024-25 remains below the historical average of 3.8%. Several factors contribute to this tempered outlook, including elevated central bank policy rates aimed at fighting inflation, and the withdrawal of fiscal support amidst high debt weighing on economic activity, and low productivity growth. On the other hand, most of the regions are witnessing a faster-than-expected decline in inflation, attributed to the resolution of supply-side issues and implementation of stricter monetary policies. In line with this trend, the global inflation is anticipated to drop to 5.8% in 2024, and further to 4.4% in 2025 indicating that risks to world growth are majorly balanced.

According to IMF, global recovery remains slow as there are growing regional divergences leaving little margin for policy error. The Red Sea crisis infused significant levels of instability within the business landscape and its impact on trade volumes will be evident in 2024-25. Higher shipping and insurance costs, combined with delayed arrival of shipments will continue to disrupt global value chains, thereby further squeezing margins.

The Indian economy remains a bright spot amidst global uncertainties, displaying a positive outlook for the coming years. India is poised to be the fastest growing economy among the major G20 nations. As an affirmation to Indias growing acceptance as a major economic super power, global rating agency Moodys raised Indias GDP growth forecast for calendar year 2024 to 6.8%. The improvement in the growth estimate is attributed to the robust economic performance of the country, evident in the real GDP growth forecast at 7.6% for 2023-24. Domestic demand, particularly investment, is expected to continue as the prime growth driver of the Indian economy, buoyed by the sustained levels of confidenc capabilities businessandconsumer helped India boost its ability to create unique goods and services, that include technology infusion, focus on niche & complex manufacturing, and emphasis on exports.

Indian economy exhibited strong performance in 2023, with substantially higher levels of capital formation being the growth enabler. However, the response from private sector remains inadequate despite the Governments sustained push. In addition, there is decline in the participation of foreign direct investors, affecting capital landscape. Notwithstanding these challenges, the Indian economy is set to grow on the strength of financial sector and other structural reforms. Going forward, Government should prioritise reforms in the areas of skilling, learning outcomes, health, energy security, reduction in compliance burden for MSMEs, and gender balancing in the labour force, to further propel the trajectory of growth. The Interim Union Budget for 2024-25 is expected to open new avenues with a significant 11.1% increase in capital expenditure for infrastructure, amounting to 11,11,111 crores. This substantial investment is projected to boost roads, bridges, airports, and other vital facilities, thereby improving connectivity and efficiency. Such developments are foundational for ramping up productivity and competitiveness. The expansion of the National Highway (NH) network by 60% from 91,287 km in 2014 to 1,46,145 km in 2023 remains a key driver of growth with its extended outreach. This phenomenal development is instrumental in enhancing accessibility even in the remotest parts of the country, contributing substantially to improving national connectivity. Moreover, substantial investments in infrastructure projects created numerous direct and indirect job opportunities, playing a crucial role in driving economic growth.

and logistics market is poisedThe for substantial growth, projected to surge at an annual rate of 8.8% to reach a staggering USD 483.43 billion by 2029. Key drivers propelling this growth momentum include the burgeoning e-commerce and online retail sectors, Governments adoption of logistics services through favourable policies, and advancements in technology. The industry landscape is diverse, comprising startups, SMEs, global corporations, and domestic firms. Road transportation is the dominating segment within the industry, alongside significant contributions from air, sea, and rail transportation, especially for international logistics. Technology-driven logistics companies and digital platforms are revolutionising the sector, enhancing customer experiences, efficiency, transparency amidst shifting consumer preferences and economic initiatives.

The industry has undergone a transformative shift, going beyond its traditional role of mere transportation and storage to embrace predictive planning, analytics, value-added services, and end-to-end product management, among others. Vital to the smooth flow of goods domestically and internationally, the sector now provides a host of value-added services, including packing, labelling, inventory management, and transportation, bolstered by technological solutions, including warehouse and transportation management systems.

It is noteworthy that despite advancements, Indias logistics costs remain high at 14% of GDP compared to the BRICS average of 11%, resulting from inadequate multi and intermodal transportation systems. However, initiatives like the Goods and Services Tax (GST), Gati Shakti programme, infrastructure enhancements, and automation successfully improved the efficiency of the sector. Customised transportation and warehousing services, including contract logistics, B2B express, last-mile distribution, and freight forwarding, are essential offerings in this evolving landscape. and Contract logistics emerges as a cornerstone for retailers amidst global e-commerce expansion, facilitating the seamless fulfilment of online orders through inventory management, packaging, tracking, transportation, reporting, forecasting, and warehouse management. In our country, the Make in India initiative of the Government fuels the growth of contract logistics market, ably supported by the sustained focus of Indian manufacturing industry on enhancing core competencies and cost efficiency, leading to outsourcing of supply chain management. Expert service providers, offering end-to-end solutions, encompassing documentation, tracking, warehousing, and legal compliance, are increasingly being trusted by the manufacturers. These providers emerged as strategic partners, offering tailored services to cater to the manufacturers unique needs for efficiency and technological integration.

The contract logistics market is anticipated to achieve a CAGR of approximately 8-10%, reaching s within a market value of 24,00,000 crores by 2025-26. Despite its burgeoning potential, the market remains highly fragmented, with the top 10 players accounting for only 15% of the market share. Regional players dominate the landscape, providing transactional services in transportation and storage. including lower We believe that as the industry matures over the inefficienci next few years, there will be a significant shift pure-play transportation and warehousing services towards sophisticated, high-value and integrated logistics solutions.

Similarly, the B2B express market is thriving with an expected 15% CAGR, well-positioned to reach 24,000 crores by 2026. Unlike contract logistics, this segment is more organised, with major players commanding 70% of the volume. The segments growth is further fuelled by increasing demand for direct-to-consumer services, omni-channel fulfilment solutions, and high adoption by MSMEs and small brands.

The freight forwarding market, estimated at 45,600 crores, is forecasted to register an 8% CAGR by 2024-26. Key industries contributing to this sector include food processing, pharma, engineering, textiles, chemicals, and automotive. Moreover, on account of the Governments push towards infrastructure development, the ‘Atmanirbhar Bharat vision for attaining self-reliance in manufacturing, growing imports and exports, combined with the rising adoption of China+1 manufacturing strategy by major companies are expected to drive the steady momentum of the market over the medium to long term.

Lastly, the last-mile delivery market in India witnessed rapid growth in recent years, clocking a 25% CAGR, with a projection to reach 36,500 crores by 2026. Driven by the growth of e-commerce and the increasing demand for faster and more efficient delivery services, the market is scaling new heights. In addition, the Government of Indias focussed initiatives, including Open Network for Digital Commerce (ONDC), Make in India, Digital India, and Skill India are expected to boost the segment. Despite the surge, last-mile still remains the most expensive component of supply chain, highly complex in nature with high service level requirements.

In India, logistics cost as a percentage of GDP stands at approximately 14%, substantially higher than those in developed countries, ranging between 7-8%. This higher cost is driven by certain

transportation speed, higher transit inventory, theft and damages, and a skewed modal mix. Currently, road accounts for nearly 70% of transportation by volume, while rail, ocean, and air collectively consisting of the remainder. The Indian Government launched several plans, such as National Logistics Policy (NLP), and PM Gati Shakti National Master Plan (NMP) to revolutionise logistics sector. Moreover, game-changing initiatives like Unified Logistics Interface Platform (ULIP) and ONDC focus on enhancing efficiency, reducing bottlenecks, and positioning Indian logistics sector as an attractive global partner, propelling the country closer to its ambitious goal of achieving a USD 5 trillion economy goal.

The NLP aims to cut logistics cost by near global benchmarks by 2030 by reducing the cost of logistics from 14-18% of GDP to global best practices of 8%. The key building blocks of the policy are Digital Integration System, ULIP, Comprehensive Logistics Action Plan, and E-Logs (Ease of Logistics Services), among others.

ONDC is an initiative designed to promote open networks for all aspects of exchange of goods and services over digital or electronic networks. It is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. ONDC is expected to make e-commerce more inclusive and accessible for consumers.

The MMLP represents a holistic approach to integrating different modes of freight transportation, including highways, railroads, and inland waterways. Designed to provide several capabilities, the MMLPs offer freight gathering and distribution along with seamless intermodal freight transportation. Additionally, users are set to receive value-added services including custom clearances and IT services, as well as storage and warehousing solutions. A total of 35 multi-modal logistics parks with a capital budget of 50,000 crores are planned across the country.

PM Gati Shakti Masterplan was launched by the Government of India in 2021 with the purpose of creating a world-class, seamless multi-modal transport network in India. Since its inception, 13 State logistics policy have been notified and uploaded on Department for Promotion of Industry and Internal Trade website.

This project involves the and Western Dedicated Railway Freight Corridors (DFCs), having a cumulative length of over 3,000 km. It aims to drive down overall logistics cost by improving the average speed of rail freight trains, optimising freight capacity per trip, and establishing seamless connectivity with ports for faster freight movement. The objective is to decongest high density rail routes and facilitate modal shift from road to rail and to coastal shipping, thereby reducing carbon footprint in logistics.

Under Phase-I of Bharat Mala Pariyojana, a robust plan was outlined for the development of a total of 34,800 km of National Highway infrastructure. As of December 2023, significant strides were made in this direction, with 76% of the planned length, equivalent to 26,418 km, awarded for construction, and approximately 15,549 km already completed. Progress on the project was delayed due to the Covid-19 pandemic as well as issues related to cost overruns and land acquisition. Despite these challenges, it is expected to be completed by 2026.

Sagarmala programme is underway to reduce logistics cost for domestic and EXIM trade by harnessing Indias long coastline and navigable waterways. There are 839 investment of nearly 5.8 lakh crores, aimed to be undertaken for implementation under the Sagarmala Programme, out of which, 241 projects worth approximately 1.22 lakh crores have already been completed.

The PLI scheme is a major policy initiative by the GOI with an outlay of approximately 1.97 lakh crores in subsidies and incentives to boost manufacturing across 13 critical sectors. As of June 2023, 733 applications were approved across 14 sectors with expected investment of 3.65 lakh crores.oftheEastern Noteworthy is the inclusion of 176 MSMEs among the PLI beneficiaries, representing a varied range of sectors, including bulk drugs, medical devices, pharma, telecom, white goods, food processing, textiles, and drones.

Logistics industry is in the middle of a massive transformation, driven by shifting consumer behaviour, advancements in technology, Government push for infrastructure development, and sector formalisation. Listed below are some of the key trends that will shape the future of logistics in India.

In todays market ows due to geopolitical landscape, customers are increasingly informed and demand superior experiences, while seeking the flexibility to purchase across various sales channels, with the expectation of consistency in their interactions. Supply chains across industries are witnessing a paradigm shift towards new channels, including e-commerce and quick commerce, which registered multi-fold growth compared to traditional retail channels. Emergence of Direct to Consumer (D2C), Direct to Retailer (D2R), Direct to Kirana (D2K) models and fulfilment via ONDC are poised for exponential growth.

Development of multi-modal infrastructure is pivotal for the complete overhaul of Indias logistics framework, transitioning from point-to-point movement to a more sophisticated Hub and Spoke model. Over the past year, several large Indian and multinational companies made investments in developing multi-modal capabilities. There is a growing emphasis in the country on leveraging rail, sea, and inland waterways more effectively to optimise overall logistics costs and bring it at par with advanced economies. In line with this objective, we project a steady shift from road transportation to other modes driven by favourable Government initiatives, like Gati Shakti, infrastructure build-up, such as dedicated freight corridors, and increased customer awareness.

Tier 2 and Tier 3 cities accounted for more than 50% of total e-commerce orders in 2023, growing at approximately 25% YoY. There is a rising appetite among shoppers to buy everything online, from electronics, apparels to packaged goods. With improved connectivity due to improvement in the infrastructure and democratisation of technology, these cities are set to be the next growth drivers for most of our key end-markets.

Recent geopolitical events further highlighted the risks of over-reliance on a single supplier. In this scenario, cross-border supply chains emerged as key focus areas for many companies having a global footprint. These companies are diversifying their supply chains through onshoring, nearshoring, and friend-shoring suppliers. Amidst this burgeoning landscape of supply chain diversification, India stands out as an attractive option for manufacturing, owing to its strategic location, a large domestic market, low labour costs, and production-linked incentives announced by the Government. Moreover, the Government of India is rigorously negotiating bilateral trade agreements with 20 nations. This creates a vast window of opportunity for freight forwarders to expand their footprint into cross-border trade.

Companies are looking at improving the overall efficiency of their logistics operations, while streamlining the entire supply chain. Their key strategies include reducing costs through optimised network footprint, efficient inventory management, deployment of best-in-class digital tools, higher degree of automation, and standardisation of operating procedures across the entire network. Global companies seeking to expand operations in India are looking for a single point of contact to make logistics hassle-free. As a result, there is a growing demand for strategic partnerships with logistics solution providers with end-to-end capability to deliver on network optimisation, cost efficiency, service fulfilment, risk management and customer delight.

There is sharper focus on improving the predictability of supply chains, prompting the companies to delve into the granular and multi-variable dimensions of their supply chains. This generates a ripple effect, with logistics solution providers boosting supply-chain dynamics by building operational efficiency with significant investments in the technology infrastructure. Several use-cases of digital technologies, such as blockchain, robotics, automation, and predictive analytics have come up to support innovative business models. We believe that technologies like Internet of Things (IoT), drones, automated guided vehicles (AGVs), augmented reality (AR), and marketplace platforms are expected to witness greater adoption in the future, further enhancingoverall

Amid global concerns around climate change, sustainability is not just confined anymore to board room discussion across major industries; rather it is supported by workable initiatives to derive greater tangible outcomes. Across the world, there is an increasing commitment by companies and governments to reduce their carbon footprint and become more sustainable, with organisations assessing the social and environmental impact of their supply chains. Logistics forms a core element of any enterprise activity and has a high carbon footprint. As a result, there is a growing demand for green logistics with focus on fleet electrification and use of renewable energy across the supply chain.

The Indian mobility market is estimated to be around 1.22 lakh crores, characterised by a fragmented structure, divided into B2B and B2C segments, valued at nearly 16,400 crores and 105,800 crores, respectively. About 85% of the B2C market is a local taxi market, which is highly fragmented and, therefore, remains non-addressable. Our addressable market, including enterprise mobility services, cab-on-demand, airport pickup & transfer, and outstation services, is estimated to be positioned at 40,000 crores.

B2B segment witnessed on a positive trend with increase in corporate travel and return-to-office mandates. We anticipate a shift in the market from being a vendor-based model to an end-to-end mobility solutions provider, buoyed by improved service quality, safety, and green transport solutions.

MLL, through its brand Alyte, operates in the B2B segment of enterprise mobility and on-call services. Our primary customer segments for the enterprise mobility services include IT, ITeS, BFSI, BPO, consulting, e-commerce, and manufacturing sectors. The market is highly fragmented and is primarily served by local and regional players. However, we envisage a significant degree of consolidation in this market, enabled by rising service quality, safety requirements, and growing demand for green transportation solutions, which local players find challenging to provide.

MLL, through its brand Meru, operates in four airports, hosting dedicated counters for airport pickup, outstation, and ride-hailing services. The B2C segment is experiencing robust growth, fuelled by the recovery in air passenger traffic to the pre-covid levels. Additionally, the airport business witnesses a significant shift towards electric fleet mobilisation. Given this optimistic business landscape, Meru and Alyte are set to enhance our range of mobility solutions with strategic focus on enterprise customers and electric mobility.

Demand for electric vehicle fleet is on the driven by the surge in fuel prices, and bolstered by the incentives rolled out by the central and state governments. The government is taking multiple initiatives, in the form of FAME subsidies, tax exemptions and reduction in customs duty on lithium batteries, to promote manufacturing and adoption of electric vehicles. The government is pursuing the major fleet operators to expand their electric vehicle fleet and convert 40% of their vehicle fleet to electric by the end of 2026. Considering the total cost of operation and low maintenance cost, EVs stand as more favourable alternatives to vehicles using conventional fuels, especially after the adoption of the more stringent BS-VI regulations. Inadequate charging infrastructure or lack of options in products are no longer seen as hindrance to adoption of EV.

Recovery in air passenger traffic and growth in business travel volume at Indian airports in 2023-24 Air traffic witnessed a growth of 8% over pre-pandemic high. Six metropolitan cities, including Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, and Kolkata will continue to dominate the domestic air travel scene in 2024, cumulatively accounting for more than 55% of all passengers. Business travel is also seen a strong recovery with employees returning to office and corporates returning to business-as-usual mode.

The sudden increase in airport travel and office commutes led to a severe shortage of taxis and drivers, straining the ability to meet the surge in demand. Many fleet owners responded to the situation by laying a strategy to attract more drivers by increasing the wages or reducing the subscription fees to make it easier for the drivers. Though, the shortage is a temporary problem that should be resolved as more drivers acknowledge the demand for rides.

Both consumers and competitors are working towards removing or reducing intermediaries from their operations. Many players in this segment have invested in technology platforms and done away with the traditionally outsourced roles of trip management, and route optimisation, among others.

As per an industry report, many companies shifted to flexible workspaces for nearly 20-25% of their workforce, after experiencing positive outcomes with remote working during the Covid-19 pandemic. This move is set to reduce the demand for employee transportation services.

Popular ride hailing companies like BluSmart, Ola and Uber continue to focus on employee transportation services, introducing new commute options for corporates. These services support employees returning to work by enabling them to book shared rides for their commute, along with extending business charter services, whereby companies can reserve a dedicated fleet of vehicles provided by third-party fleet partners for their employees and customers. Similarly, other B2B players in the employee transportation segment are expanding their services to include on-call and outstation services. Moreover, rapid metro infrastructure expansion is also leading to innovative service lines like micro-mobility, for transportation to and from the metro/rail/bus stations.

The year 2023-24 witnessed a slowdown across the industry, characterised by several end-markets facing challenges, despite the auto and discrete manufacturing sector maintaining its strength. The e-commerce industry, in particular, experienced over-capacity, particularly in volume growth, leading to capacity consolidation among major players. Furthermore, weaker consumer demand in sectors such as durables, FMCG, and retail dampened the demand for logistics services and solutions. The agricultural sector also encountered headwinds, driven by broader economic conditions. Internationally, cross-border logistics faced reduced volumes and pricing pressures due to over-capacity and numerous global challenges. Despite these hurdles, we believe this slowdown is a temporary phase, and the long-term growth prospects for the sector remain exceptionally strong.

Auto & Farm sector: The year 2023 is marked by satisfactory performance for the automobile sector, highlighted by the high single digit growth for the passenger vehicles. Demand for two-wheelers and signific recovery, three-wheelers also saw a despite the seasonality-induced moderation in growth within the commercial vehicle segment. According to SIAM, several Government schemes are yielding positive results, with an optimistic outlook for continued sectoral growth momentum in the coming year, projected at 10-12%. Technological adoption is paving the way for the mixed growth phase of the sector. For instance, EV adoption is growing, accounting for around 6% of Indias auto sales in 2023 compared to nearly 2% in 2021, reflecting an increasing consumer tilt towards EVs over the two-signific part yearperiod.EVsarealsocapturinga of three-wheeler cargo market, while establishing a strong platform there. However, a moderation is witnessed in the growth of tractor segment, driven by a slowdown in rural markets. On a comprehensive note, following robust growth trends and a relatively healthy base across automotive segments in 2022-23, the pace of overall growth moderated in 2023-24, with projections indicating a continuation of this trend into 2024-25.

Consumer sector: FMCG, durables, pharma and telecom are key end-markets for MLL in contract logistics. Low to mid-single digit volume growth is expected in FMCG with an anticipation of 7% surge in 2024-25, buoyed by declining inflation rate and increased Government spending. The competition across global industry in this segment remains intense, putting pressure on prices. On the other hand, pharma sector remains steady and is expected to register 9-11% growth in 2023-24, according to ICRA. Moreover, telecom industry showcases a moderate growth in 2023-24 owing to gradual 5G launches.

Manufacturing witnessed strong sustainable growth due to continuous efforts by the Government to boost the sector through the PLI scheme and Make in India initiative. However, the prospect may be hindered with the decline in foreign direct investments in the country. Increasing the capital investments by both Government and private sector will boost order books of capital goods players.

E-commerce sector: E-commerce is showing signs of a maturing ecosystem with consistent growth. This sector witnesses a substantial increase in the level of in-sourcing, as marketplaces consolidate their capacity with a stronger focus on profitability. This trend leads to stagnation in annual order volumes for the 3PL companies. Moreover, there is a slowdown in network expansion across large e-commerce marketplaces, affecting the level of outsourcing in these businesses. As a result, the share of 3PL companies in this space in terms of first-mile and mid-mile logistics is adversely affected. On a positive note, this years festive peak season saw better volumes than the previous year, heralding opportunities for marketplaces. However, there was a sharp tail off after the peak season in most categories except grocery which remained strong all throughout. The market witnessed a significant shift from inventory-led to pure marketplace model. Simultaneously, discovery and purchase of products through social media, known as social commerce, continues to rise, primarily led by Tier 2 and Tier 3 cities.

The freight forwarding business faced challenges this year due to increasing geo-political tensions. This led to high volatility in pricing, affecting the margins. Non-petroleum merchandise exports and imports were relatively flat over the last year. Global trade encountered substantial pressure with slowdown in China & Europe. Additionally, a overhang in ocean freight is projected to persist through 2025-26. Large carriers are expected to change their Go-To-Market given the highly volatile environment.

As per industry estimates, surface volume of domestic B2B express grew by around 9% over the last year, while air volumes remained largely stagnant at 1% during the same period. Growth in this segment was largely driven by e-commerce logistics during the year under review. Contribution of packaged food industry witnessed a surge, accounting for ~4% of express logistics. The automotive and engineering sectors maintained organic growth rate, while volumes from pharma companies stagnated during the reporting period. Average yield in the segment increased by about 2% compared to the previous year, owing to annual price hikes and the on-boarding of new customers. Looking ahead, the long-term growth outlook for the segment remains stable, with surface express projected to grow at 13-14% CAGR and air express at 8-9% CAGR.

Last-mile is the expensive component of the supply chain, accounting for almost half of the total transportation cost. It is a complex mechanism and demands high service level requirements. As a result, there is a growing trend of outsourcing in last-mile logistics services, especially with the rise of e-commerce, quick commerce and D2C brands. Moreover, the segment observed an increasing adoption of EV cargo vehicles, which is expected to grow further in 2024-25. Going forward, there will be a focus on sustainability, driven by cost competitiveness of electric two-wheelers and three-wheelers. ONDC is also likely to disrupt the market, which may drive the prices up in the short term. E-commerce companies pivot from growth to profitability is expected to exert pricing pressure, while demand may rise for multi-client logistics across micro-fulfilment and last-mile.

B2B segment is on resurgence with most companies re-opening and resuming office. As per Cushman & Wakefield, with the concerns around factors such as collaboration, innovation, and efficiency among business leaders, the focus has been to bring employees back capacity to office with a firm focus on productivity. The year 2023 saw mandates from some companies asking employees a complete return to office and others offering hybrid work strategies with 2-3 days/week. Amidst this landscape, MLL made an aggressive effort to add new customers and revive old accounts through both organic and inorganic approach. We observed a significant shift towards electric vehicles as corporates focussed on sustainable commute for their employees in the form of green transportation.

Opportunity to address progressive 1 consumption patterns through a network of strategically located multi-client, sustainable, world class warehouses

Companies are consolidating their supply ant chains following GST implementation, leading to leasing of large-format warehouses. PLI scheme announced for key sectors by the Government is expected to further boost local production, fuelling demand for Grade- A warehousing facilities. Moreover, there is a significant increase in monthly household income, along with a rise in the number of graduates in Tier 2 and Tier 3 cities, leading to higher consumer demand from these a huge opportunity for households. This us to serve these geographies by building state-of-the-art, energy-efficientnetwork of Built-To-Suit (BTS) warehouses across es and strategic locations in India. At present, we boast a 4.4 million sq. ft. of BTS warehousing space, with plan to add another 1.3 million sq. ft. in 2024-25.

2 direct-to-consumer space

Increasing digital adoption has led to a rise in omnichannel retailing. This is necessitating several companies to redesign their supply chains. Small businesses and new brands are increasingly following the D2C model, while larger brands are starting their own online brand stores and exploring D2K channels. With an increasing number of channels, companies are facing a challenge in managing the complex requirements to support B2B and B2C fulfilment. This has presented us with an opportunity to provide integrated fulfilment and distribution solutions, including express and last-mile delivery. We are also witnessing a rising trend of quick commerce (10 to 30 minutes delivery) across segments like food, pharma, and grocery. This, in turn, is fuelling the demand for micro-fulfilment centres located near key consumption pockets. With across consumption-led sectors,astrongtech-baseanddiversified service offerings, we are well-positioned to take advantage of this opportunity. Our market prominence is further bolstered by the acquisitions of Whizzard and Rivigo, enabling us to augment our capabilities in the last-mile delivery and express logistics, respectively.

3 Opportunity to offer multi-modal services to our customers

The Gati Shakti Masterplan, unveiled by the Government, is aimed at reducing systemic inefficienci logistics cost to make it competitive and at par with advanced global economies. As a part of that plan, there ant impetus to enable seamless signific is a inter-modal freight movement. Consequently, we are witnessing linkages of ports, rail and road through the hub and spoke model; and creation of logistics parks around Dedicated Freight Corridors (DFCs). Several companies are exploring alternative modes of transportation, using rail, inland waterways, or sea/coastal shipping to drive down their overall logistics costs. At MLL, we are actively offering multi-modal services, including rail transportation to auto and farm customers; and are constantly evaluating the scope of expansion of these services to customers across other sectors as well.

4 Opportunity to expand air cargo freight

With around 150 operational airports spread across India, a remarkable opportunity beckons us in the air cargo freight sector to ensure faster movement of goods to far-off destinations. This extensive network of airports enhances accessibility and connectivity, facilitating swift transportation of goods across vast distances.

5 Opportunity to capitalise on growing demand for cross-border logistics

Cross-border trade from India is witnessing an upward trajectory due to strong economic growth and improving competitiveness. This trend is expected to pick up momentum due to companies choosing India as a preferred manufacturing hub, with rising adoption of China+1 strategy. Moreover, domestic manufacturing is being boosted further through the PLI scheme, adding to Indias competitive advantage. This is expected to result in an increased demand for freight forwarding services. Leveraging end-to-end capabilities in freight forwarding through our subsidiary Lords, we are well-poised to take advantage of this opportunity. We also commenced our operations in air chartering business in key international market of the UAE. This expansion allows us to enhance our global presence and cater to the demand on critical trade lanes originating from the UAE. With a strong emphasis on B2B air chartering and bolstering brand visibility, we see an opportunity to thrive amidst geopolitical tensions and market volatility.

6 Services and technology integration

Owing to increasing supply chain complexities, customers are demanding integrated and managed logistics services. As a result, we are also evolving to move up the value chain by providing tailor-made solutions to cater to specific needs of each sector, thereby expanding their share of wallet. Companies are exploring the use of self-guided vehicles, drones, robotics, augmented reality, IOT and Big Data to improve operationalefficiencies. Integration of ‘edge level technologies and predictive intelligence in the service offerings have the potential to generate exponential benefits. At MLL, we harness an internally developed tech stack ‘LogiOne which can be customised to address various complexities of customers supply chain.

7 Leading Green Logistics Portfolio

Logistics and transportation are a key contributor to overall carbon footprint, estimated at as much as 13%-15% in India. Companies are relying on logistics solutions providers, seeking strategic partnership to jointly reduce the impact of emissions arising from their supply chain. At MLL, we implement several sustainable initiatives, focussed on carbon neutrality, circularity, and resource conservation. Our EDel EVs for last-mile distribution result in significant emissions. Additionally, we^{reduction in CO}2 are investing in the areas of sustainable infrastructure, energy conservation and sustainable packaging to create a win-win solution for our customers and MLL. With the objective of building a clear set of metrics, which can be transparently measured and aligned to specific projects, we joined the Science Based Targets Initiative (SBTi), further taking us closer to our vision of becoming carbon neutral by 2040.

8 Increasing demand for EV fleet among corporates and airport authorities

The Government of India has created favourable policies for the promotion of EVs under FAME-II. EV technology is well-suited for mid-range shared mobility applications. With companies focussing on moving towards a sustainable way of doing business, EV as a medium for employee transportation is gaining traction. Moreover, airports are also looking for avenues to reduce their carbon footprint, by preferring EV adoption in taxi services. From a total cost of operation and maintenance perspective, EVs have become favourable to conventional fuel vehicles, especially after the adoption of the more stringent BS-VI regulations. Inadequate charging infrastructure or lack of options in products are no longer seen as hindrance to adoption of EV. MLL, through its Meru brand, owns a fleet of over 120 EVs deployed at major airports and corporate parks across India to serve our existing and new customers, thereby driving the sustainability agenda.

1 Impact of geo-political crisis on ocean trade volumes

Geo-political tension in West Asia affected routes through Suez Canal, which handles about 30% of global container trade. This shippingconflict costs, insurance premiums and transit times due to re-routing, aggravating the risk of cargo loss due to piracyorattacks.Thisconflictis set to impact the trade volumes in 2024-25.

2 Rising crude oil prices leading to high transport costs

Severe volatility in crude oil prices resulted in a surge of fuel prices in India, directly impacting our transportation business. The outlook for crude oil prices remains volatile because of geo-political tensions.

3 Slowdown in e-commerce network expansion

E-commerce companies are consolidating warehousing space due to volatile volume, and over-capacity, while experiencing stagnation in the annual order volume for 2023-24. There is high pricing pressure in this segment leading to slowdown.

4 Talent and labour constraints

Availability of skilled manpower remains a challenge, especially during peak periods, thereby increasing labour costs due to demand-supply mismatch. As we focus on developing new capabilities, creating a robust pipeline of talent in critical areas and enhancing our organisational culture are identified as critical long-term growth.

5 Pricing pressure from customers

Rising input costs, stemming from increase in commodity and crude oil prices, made most of our customers focus on cost rationalisation. This led to increased pricing pressure in contract logistics and last-mile delivery. To address this challenge, we are focussing on value addition and driving cost-optimisation initiatives across the organisation.

6 Impact due to deferred Return to

Post-pandemic, most customers in our major end-markets continued to follow partial work-from-home policy to infuse flexibility in working conditions, with some moving to a permanent work-from-home option. Consequently, we witnessed a sluggish recovery of enterprise mobility. To tackle this challenge, we diversified into new business segments and moved our focus from predominantly serving the IT/ITES and banking sectors to e-commerce and manufacturing.

In 2023-24, our standalone revenue stood at

4,529.90 crores, a marginal increase from

4,458.90 crores in the previous fiscal. Gross margin increased to 11.1% as compared to 10.5% in 2022-23. EBITDA also witnessed a nominal growth, reaching 292.39 crores compared to 276.29 crores in last fiscal. Profit before tax rose to 85.55 crores from 80.44 crores, indicating improved operational performance. Profit after tax declined marginally, reaching 61.98 crores in 2023-24 compared to 65.53 crores in 2022-23. Standalone results were impacted during the year due to one-time charges of 12 crores. Adjusted for these one-time charges, PBT grew by nearly 21% compared to the previous year. The same translated into diluted earnings per share, that stood at 8.58, compared to 8.94 in the preceding fiscal. MLL experienced robust consolidated revenue growth in 2023-24, reaching 5,506 crores, with a surge of 7% compared to the previous year. However, gross margin decreased moderately to 9.5% from 10% registered in 2022-23. Despite challenges in the B2B segment, cost optimisation efforts enhanced operating margins in Q4. Moreover, we made significant strides in business integration, highlighted by the second tranche of investment in Zip Zap Logistics. Our core 3PL segment remained steady, while the mobility segment showed positive momentum. EBITDA was recorded at 229.04 crores, down from 259.76 crores in 2022-23, partially attributed to one-time charges of 12 crores and the impact of consolidation due to investments made in B2B express business. Consequently, Profit after tax declined to (54.74) crores from 26.28 crores. Adjusted EBITDA, excluding B2B express impacts, stood at 309 crores and PAT at 69 crores. Overall, in 2023-24, earnings from our core 3PL and other businesses remained stable and showed improvement.

In recent years, we invested in multiple acquisitions to enhance our portfolio of solutions and services. The progress we made in this direction is listed below:

The is a table illustrating the breakdown of our consolidated revenue from operations, across the business segments that we operate in, for the periods indicated.

The following is a breakdown of the percentage of revenue from operations with respect to our products and services. Goods Transportation Services continue to be the largest contributor to revenues.

In 2019-20, we articulated a bold vision of becoming a 10,000 crores logistics service provider. This vision is driven by our commitment to deliver exceptional customer experience through differentiated, technology-enabled solutions. To achieve this vision, we outlined our strategic priorities, aimed at expanding our presence in profitable markets through four core platforms. We made significant strides in aligning our strategic initiatives with this vision. The focus for next couple of years will be to strengthen the offerings, drive execution, and realise synergy benefits to achieve the vision.

B2B express: B2B express logistics continues to see strong tailwinds as customers focus on deepening delivery networks, enhance digital adoption, and invest in agile supply chain. The acquisition of Rivigo gave us the access to pan-India express network, with 17 processing centres (hubs) and more than 200 branches, covering over 19,000 pincodes and best-in-class technology stack. During the year, we successfully completed the integration of Rivigo, focussing on turning around the business. We saw higher synergy between the express business and our 3PL business. The express business saw significant improvement in margins in Q4 2023-24. The focus area for next year is to get the cost structure right and scale-up volumes.

Last-mile delivery: Last-mile delivery is expected to witness high double-digit growth on account of evolving customer needs. Quick commerce and D2C/D2K models are driving the next phase of growth in the last-mile delivery space, already creating a large market for micro-fulfilment. Our completion of strategic acquisition of Whizzard in 2023-24 gave us 60% stake in the Company. Additionally, we completed integration with ONDC to provide same-day and next-day intra-city pickup and delivery services to all sellers, based in Bengaluru and NCR. The focus for 2024-25 is to integrate Whizzard with MLLs last-mile business, unlock operational synergies and grow volumes in profitable segments.

Cross border freight: The cross-border freight segment faced significant headwinds due to broad macroeconomic challenges, leading toshiftin global trade flow and price correction. However, we were ableoffset to the impact partially through volume growth. During the year, we started the air charter business in Dubai and seek to scale-up the business in 2024-25. We are also evaluating options for strategic partnerships to gain market share in key trade lanes.

Mobility: Mobility segment enables us to continue with the expansion of our services on on-call, intra-city movement, while widening our portfolio for enterprise transportation services. We also focus on scaling up the city coverage of our airport services and on-call services.

Supply chain complexities increased in the recent past to address changing consumer preferences and demands. In response, our customers seek solutions that optimise their end-to-end needs from imports and inbound transportation, to storage, outbound transportation, distribution, fulfilment, right up to returns processing and reverse logistics. Keeping this trend in mind, we developed sector-specific solutions, revamped our sales processes and technical capabilities, and aligned solution design organisation to offer tailored solutions to our customers. We are looking to enhance our solutions and provide more options with the integration of offerings from the strategic acquisitions, made during last two years, with the core business. In mobility segment, our focus is on driving greater integration across services, to position the Company as the one-stop-shop for all enterprise mobility requirements of our customers.

We are continuously working towards establishing best-in-class processes and systems across the organisation. Our Centre of Excellence team works towards standardisation of operations across sites, developing functional competencies, and exploring avenues for automation and innovation at our sites.

We continue to develop and adopt consistent and common operating systems focussed on safety, workforce management, productivity, and process excellence. Alongside, we prioritise enhancing and integrating our solution design capabilities to deliver a consistent experience to our customers, encompassing the entire supply chain - from design to delivery.

During the year, we revamped our customer service process to make it more proactive. We integrated Salesforce CRM to deliver seamless experience across the customer journey, right from on-boarding to problem identification, and resolution. We intend to nurture our relationship with customers and become a strategic supply chain partner.

The transportation service line contributes significantly to our operations. We source our fleet from a large network of business associates spanning the country. We follow a robust mechanism for partner selection, on-boarding and development. Additionally, we undertake a host of programmes aimed at improving partner loyalty, service quality and performance. We strive to continue such investments in our partners to foster long-term, mutually beneficial collaborations. During the year, we joined hands with an e-commerce major for integrated pan-India line haul solutions. Through this collaboration, we managed to improve turnaround times and service quality, reducing the Total Cost of Operations and improve service levels. Our industry witnessed a consistent trend of supply chain consolidation post GST implementation, and we continue to take advantage of this opportunity. We entered into contract with large, smart, and multiuser warehouses at strategic locations across India, to utilise their ability to suit the highly flexible needs of end-markets. We plan to keep expanding our network of built-to-suit (BTS) warehouses over the next few years, achieving 6 million sq. ft. capacity by end of 2024-25. As of 31 March 2024, our BTS warehouse capacity stood at ~4.4 million sq. ft., and we are well on track to realise our 2025-26 aspirations. Within the mobility segment, there is a continued focus on operational excellence with a high impetus on vehicle and driver safety, enhanced service level assurance and digitisation on operating processes. This will enable us to enhance service quality and reduce the Total Cost of Operations per trip.

Over the past several years, we consistently invested in digitisation and technology enhancement to augment and optimise our operations to serve our customers better. We started the development of our flagship integrated tech stack LogiOne to host our in-house transport & warehouse management system, ocean & air freight management system, and express & last-mile suite. Along with these, LogiOne is designed to house optimisation suite for load & route management. Data from all the systems is set to flow into a central data lake, where the data analytics layer will run algorithms, process the data, and share valuable inputs supplementing our operations and decision making. Through LogiOne we plan to remove redundancies in various legs of supply chain and enable seamless operations for our customers. To capitalise on emerging technological trends, we launched pilots to incorporate cutting-edge technologies, including drones, AGVs, and IoT in our business. We also commenced the development of MLL Technology and Automation Centre at our upcoming BTS warehouse park in Pune. This centre is being designed to focus on the development of automation systems, test use-cases and accelerate deployment across our operating sites throughout the country.

In our endeavour to drive innovation, we run programmes like Catapult and Techathon. Through Catapult our incubation programme we nurture startups and drive innovation in the logistics sector. In addition, the Catapult-Techathon extends this programme to the academic realm, inviting college students to propose innovative solutions to industry challenges. This initiative helps us to identify emerging technology leaders and integrate fresh perspectives into the logistics industry. Our dedication to consistently cultivate new talent is further reinforced through these programmes. In the mobility business, technology is a key lever for optimising customer experience and route profitability. We continue to focus on technological advancement in these key areas. With stronger focus on customer services as well as enabling greater inter-operability of fleets across different service levels, we are able to increase the vehicle utilisation, thereby enhancing earnings for driver-cum-owners (DCOs) and boosting EV fleet utilisation.

Our commitment to sustainability forms the foundation of our mission to foster a fair transition towards a future that benefits our planet. This commitment is upheld by three core sustainability pillars. Firstly, we prioritise the decarbonisation and development of eco-efficient infrastructure. Secondly, we are dedicated to reducing the carbon footprint of our solutions. Lastly, we endeavour to rehabilitate the ecosystems in our vicinity. These pillars guide us in our pursuit of carbon neutrality by 2040, underscoring our unwavering commitment to environmental stewardship.

Our EDel services boast the largest fleet of electric vehicles for last-mile delivery, significantly reducing carbon emissions in our operations. We proudly stand among the elites in the logistics sector, having received validation from the Science Based Targets Initiative (SBTi) for our firm commitment to reducing carbon emissions. Moreover, the Company leads the industry with the most extensive network of solar-powered warehouses nationwide. We are dedicated to expanding our warehousing network with Green IGBC Gold/Platinum certified facilities, harnessing renewable energy to minimise our carbon footprint. Through initiatives such as the Green Hour practice conducted monthly across our facilities and our participation in the ACE programme to optimise electrical energy consumption, we demonstrate our unshakable dedication to sustainability. These endeavours exemplify our proactive approach to setting the standard for a greener and more sustainable future.

Amidst numerous challenges, we remain committed to executing our strategy. Our optimism about long-term growth, paired with our unique market position, keeps us inspired and motivated. We firmly believe that boosting supply chain productivity needs a strong emphasis on integrating various services to further improve customer service, strengthen resilience, and agility, and reduce the ‘cost to serve. Our investments and expansion efforts in 2023-24 are set to further augment our ability to connect India through a diverse range of services and solutions. Using our strategic advantages, we are well-prepared to capitalise on the long-term growth opportunities within the sector. Our focus on improving our array of services and solutions remained pivotal in our growth journey to serve our valued customers in FMCG, e-commerce, pharma, retail, and FMCD sectors. Through the expansion of our services and integrated solutions, we forged stronger partnerships with our clients. Notably, in 2023-24, more than 24% of our revenue stemmed from integrated solutions, showcasing the increasing demand for comprehensive offerings. Additionally, around 60% of our Top 100 customers utilise more than two services and multiple offerings from our portfolio, marking a significant milestone that underlines the depth and breadth of our engagement with key partners.

As of 31 March 2024, we operate in over 19,000 pincodes, encompassing a substantial portion of the countrys economic activity. Our last-mile delivery business serves over 6,000 pincodes for B2C fulfilment. Moreover, our full-truckload operations sustained its growth momentum, with our owned and partner fleets collectively covering over 500 million km in 2023-24. We also launched Pro Trucking, a high-performance network transportation, catering to our larger customer base. Furthermore, we continued to expand our multi-modal rail logistics for automotive and farm customers. In 2023-24, over 17% of the total volume for these customers was transported end-to-end via rail.

During the year, we added substantial multi-client and custom warehousing capacity and launched expansions in various areas.

We strengthened our warehousing capacity by adding 1.4 million sq. ft. of facility, including the expansion of our multi-client units in 2023-24. Moreover, we are committed to widen our network further with new facilities of over 1.0 million sq. ft. coming up in Kolkata, Guwahati and Agartala. We also have expansions underway in Chakan/Talegaon and Phaltan in Maharashtra, totalling over 1.5 million sq. ft.

Our global air charter business, headquartered in Dubai, launched commercial operations this year. Despite the external challenges, we were able to successfully undertake several charter flights for marquee customers in pharma, and electronics, as well as in humanitarian aid domain. We made significant our technology and digital capabilities. The development of the LogiOne ecosystem saw the release of our transport management system, warehouse management system, and other systems, which will be integrated together to provide customers with higher levels of visualisation and optimisation of the supply chain. We envision creating a leading logistics institution that offers comprehensive end-to-end services. To achieve this, we are steadily building a future-ready organisation, expanding our operational reach, upgrading facilities, and adopting sustainable practices. Our investments in electric vehicles and advanced technology promote scalable growth, establishing us as pioneers in environmentally friendly logistics. By deploying EVs for the last-mile delivery space and leveraging them to establish Indias largest EV-enabled last-mile delivery network through our comprehensive EV ecosystem, EDel, we are shaping a thriving future for the logistics industry, simultaneously enhancing the connectivity across India.

We operate in a highly fragmented yet expansive market. A market which is on the cusp of transformational changes that affect a large number of people, including those from socio-economically backward sections of society. This continuously drives us to strengthen our risk governance framework for business sustainability.

Our Board of Directors takes direct responsibility for establishing, developing, and reviewing our risk management framework that encompasses policies, processes, and mechanisms to identify, manage, and mitigate risks, while spotting new growth opportunities. The Board sets our risk appetite, identifies areas for risk mitigation, and establishes implementation processes. We put in place an elaborate organisational structure to help businesses proactively capture and report risks on a regular basis.

The management of the Company is committed to ensure effective internal control systems, commensurate with the size and the complexity of the business. The adequate and effective internal controls, established by us, seek to achieve MLLs compliance and reporting objectives. The controls are deployed through various policies and procedures, which are periodically revisited to ensure that they remain updated with the changes in the business environment. Moreover, these polices and processes are regularly evaluated by internal and statutory auditors, with suggestions to further strengthen them and enhance their efficacy shared with respective process owners, following which requisite changes are made.

We invest in various IT initiatives to automate controls to the extent possible and minimise errors and lapses. The Audit Committee reviews the adequacy and effectiveness of our internal control environment and monitors the implementation of audit recommendations.

The financial statements were with the requirements of the Companies Act, 2013. We adopted the Indian Accounting Standard (IND AS) from 1 April 2016. The consolidated financial statements were prepared in compliance with applicable IND AS 110 and are presented in a separate section.

1 Share Capital capital of the Company stands The at 105 crores divided into 10,50,00,000 equity shares of 10 each. Our paid-up capital at the end of the year was recorded at 72.04 crores compared to 71.98 crores the previous fiscal. The increase is to the allotment of 59,121 equity shares on account of exercise of options, granted under our Employee Restricted Stock Unit Plan 2018 during the year.

2 Retained Earnings

The retained earnings, indicated as surplus in the statement of profit and loss, as of 31 March 2024 was at 468.54 crores compared to 423.93 crores as of 31 March 2023.

3 Borrowings

Borrowings, as of 31 March 2024, stood at 82 crores compared to 150 crores as of 31 March 2023, on account of repayment of working capital demand loans from the banks during the year ending 31 March 2024.

Property, Plant and Equipment and 4 other Intangible Assets (including RoU Asset, CWIP and Intangible Assets under Development)

property,The plant and equipment and other intangible assets, including RoU asset, CWIP and intangible assets under development, amounted to 529.15 crores as of 31 March 2024, compared to 554.59 crores at the end of previous fiscal. Adhering to asset-light business model to execute our operations, we incurred capital expenditure to the tune of 66.41 crores during the year, mainly on incompliance account of the purchase of material handling equipment for warehousing services, EDel vehicles and other IT equipment and software. Furthermore, the addition due to Right of Use Assets under IND AS

116 stood at 137.77 crores during the year under review.

5 Trade Receivables

Trade receivables at the end of 2023-24 was recorded at 508.92 crores, which amounted to 11.23% of our revenue from operations compared to 451.38 crores, consisting of 10.12%, at the end of 2022-23.

6 Results of Operations

Revenue from operations: Revenue from operations increased to 4,529.90 crores in the year ended 31 March 2024, as opposed to 4,458.90 crores at the end of previous fiscal, registering a growth of 1.59%. Other Income: Other income mainly comprises interest income from fixed deposits/security deposits, gain on sale of units of mutual funds, and interest on income tax refund. The increase in other income from 12.04 crores in 2022-23 to 13.30 crores in 2023-24, was primarily driven by interest income.

Total Expenses: Employee benefit encompasses salaries and wages, including bonus, contribution to provident and other funds, gratuity, and staff welfare, among others. Employee benefit expense as a percentage of revenue from operations decreased from 6.48% in 2022-23 to 6.29% in 2023-24. The increase in depreciation and amortisation expenses is due to the impact of capitalisation of assets done during the year under review and increase in amortisation of rentals under IND AS 116.

Operating expenses, including cost of materials consumed and changes in inventories, stood at 84.54% of revenue from operations in 2023-24 as compared to 85.22% in 2022-23. It mainly included freight and related expenses, labour and allied expenses, warehouse and related expenses, and rent, among others. Operating expenses decreased marginally due to operational during the year under review.

Profit before tax was registered at 85.55 crores in 2023-24 compared to 80.44 crores in 2022-23, clocking an increase of 6.35%. Profit after tax was recorded at 61.98 crores in 2023-24 as opposed to 64.53 crores in 2022-23.

The consolidated financials include financials of our seven subsidiaries, i.e. Lords Freight (India) Private Limited, 2x2 Logistics Private Limited, MLL Mobility Private Limited, MLL Express Services Private Limited, V-Link Freight Services Private Limited, MLL Global Logistics Limited, and Zip Zap Logistics Private Limited.

Consolidation of the financial statements of the Company and our seven subsidiaries is done on a line-by-line basis, adding together items like assets, liabilities, income, expenses after eliminating inter-company transactions in accordance with IND AS 110. Equity method of consolidation is used for associate entity. The consolidated financial statements are presented in a separate section.

The consolidated revenue from operations amounted to 5,505.97 crores by the end of 2023-24, as against 5,128.29 crores by the end of 2022-23, registering a growth of 7.36%. Consolidated profit/(loss) stood at (54.74) crores compared to 26.28 crores in 2022-23, recording a decline of 289.90%. Profit/(loss) after tax, attributable to non-controlling interest, was at 1.65 crores for the year under review as against (1.65) crores in the previous year.

Return on equity (%) declined to (10.39)% in the current year from 4.74% in the previous year due to lower profits in the current year.

Inventory turnover fell down to 1.00 in the current year from 7.64 in the previous year due to lower utilisation, coupled with a lower base of inventory.

Net capital turnover declined to (73.78) in the current year from 134.49 in the previous year on the base of negative average working capital due to an increase in the current liabilitiesNet profit margin declined to (0.95)% in the current year from 0.53% in the previous year on account of lower profit for the year.

Return on capital employed declined to 0.18% in the current year from 6.76% in the previous year owing to lower profit for the year.

In pursuit of MLLs vision to become a 10,000 crores logistics service provider, our human resources function plays a significant role. It enables us to achieve the targeted deliverables by enhancing overall employee experience. Our strategic focus remains on priorities like nurturing innovation, enhancing problem solving capabilities of our team, building future talent pipeline, and leveraging analytics for informed people decisions, all of which contribute to our competitive advantage. Moreover, we remain committed to empowering communities by prioritising the recruitment of individuals from below poverty line. Our initiatives related to third-party manpower and business partner management ensure seamless engagement and harmonious work relations.

We uphold an employer-employee relationship that is characterised as fair, just, trusting, and caring. This is assimilated into the employee lifecycle through continuous reinforcement via communication platforms and the celebration of success stories. The HR function drives excellence by digitising work processes and deploying technology to drive engagement, efficiency, simplicity, scalability, and empowerment.

We received the Great Place to Work certification for the third year in succession. Based on the insights received from the previous GPTW survey, we unveiled several initiatives to drive engagement and improve the Trust Index score. The survey also emphasised our robust processes for overall employee development, collaboration, and inclusion, while highlighting solid employee assistance throughout the lifecycle. Even though the overall employee perception in MLL is positive, we intend to strengthen it further by designing and institutionalising industry-leading practices.

We are digitising HR process through our HRMS platform Nectar Darwinbox. It simplified the overall employee lifecycle, with easy data navigation, workflows, and lower turnaround time for processing transactions. Furthermore, we successfully deployed face recognition-based attendance system for our blue-collar workforce to drive higher levels of automation and process efficiency. Moreover, we conduct Townhalls every quarter, where employees across locations join virtually. They get to ask questions directly to the leadership team and seek clarifications on pertinent issues.

There were 3,740 permanent employees on the rolls of Company as on 31 March 2024.

We are committed to achieving our growth objectives by developing integrated solutions and leveraging technology-enabled experiences. To ensure a smooth transition of our recent acquisitions into the immersive culture of MLL, HRMS and LMS system integrations are deployed. LMS licenses are also extended to employees in subsidiaries, with the digital Triumph Awards platform expanded to our subsidiary companies. In performance management, mandatory L&D KRAs of 20 hours of learning, along with a leadership development programme like Flex, are carefully crafted to suit the diverse nature of business of our subsidiaries.

To strengthen the succession pipeline, the leadership team identified talent for an accelerator programme, conducted by the Mahindra Leadership University. The nominated participants undergo an intensive development around the focus areas facilitated through formal learning, perspective building, coaching, leadership interactions, peer-sharing, and action learning.

In the journey towards empowering our workforce, we embarked on a strategic initiative centred around personalised learning solutions, utilising cutting-edge digital platforms, including HMM Spark and Udemy Business. This transformative approach empowered our employees with self-paced learning opportunities, catering to their individual needs and preferences, while also focussing on nurturing talent pools. Moreover, we continued our journey on Lean Six Sigma Black, Yellow and Green Belt Projects to empower our employees with the skills and knowledge needed to lead process improvement initiatives within organisations. This training was a crucial step in cultivating a culture of continuous improvement, driving operational excellence, and delivering tangible results in terms of quality, efficiency, and cost reduction. Over 500 employees worked on around 70 projects under MBB, MYB and MGB.

Kaizen, which means continuous improvement, encouraged innovative problem-solving ideas among employees. Additionally, trainings were conducted for on-roll, full time contract and third-party employees. Locations identifying and implementing Kaizens were awarded, with best Kaizens being published across the organisation. Notably, we implemented more than 55,000 Kaizens in last two years.

Capability building of third-party employees through training is a vital aspect of fostering a productive and engaged workforce. By offering comprehensive training programmes that incorporated health and safety modules, we not only equipped third-party employees with the knowledge and skills required to perform the task efficiently but also prioritised their physical and mental well-being. Recognitions such as Champion of the month and Quarter programmes went a long way in reinforcing a sense of belonging and competence, ultimately leading to improved performance and overall job satisfaction. Business associates underwent detailed safety training in addition to on-job training. A customised training programme was devised for each site, depending on the business. The trainees were y efficienc assessed and awarded different levels of badges indicating the skills attained. Employees were able to multi-task due to the fast and effective training process. Furthermore, Sanjeevani 2.0 was conducted for all sites with a manpower greater than 20. This version, focussing on five key pillars of Sanjeevani programme communication, engagement, capability building & growth, welfare, and inclusive participation was implemented. HR connect sessions were conducted and Works Committees were implemented under this programme, ensuring an open channel of communication for our permanent, FTC, and third-party employees.

In our pursuit to directly improve the bottom line, empowering the account delivery managers/ site leads, who are the primary breadwinners of the Company, seemed extremely essential and high yielding. Accordingly, the Flex Programme was designed, taking into consideration that the ADM oversees the entire P&L of the project.

Considering escalating competition and the evolving objectives of our organisation, a unique strategy was formulated to elevate our capacity-building procedures. We followed a systematic approach towards capability building of employees across all levels within the organisation, based on the concept of addressing the following: Capability building to address current needs Capability building to address future needs of the people Alignment with group capability building initiatives

The objective of FCF was to enable us to attract, retain, and engage employees by demonstrating options for growth. It enabled employees to know what competencies are needed and measured. The exercise of FCF was undertaken in 2023-24 and by mapping the same we were able to achieve the following aspects: A way to clearly communicate capability expectations across the organisation A tool to help people make choices that best support strategic goals A framework for leaders to direct development opportunities more effectively

Performance Management

We created a high-performance environment where employees were inspired and aligned with the purpose and strategy of the organisation, enabling the alignment, and cascading of the organisation BSC across levels. Leaders, managers, and supervisors were equipped with the right skills for setting, reviewing KRAs, and providing timely and effective feedback on performance through the launch of the Unnati e-learning module.

Talent assessment and the competencies ensure that talent is calibrated and developed for future roles through functional and leadership capability building. We revamped the performance management process, career growth, and compensation practices, with the process undergoing a detailed review. The revised policy was implemented after considerable dialogue with the leadership team. An Appraisal Grievance Redressal mechanism was launched to address employee grievances in a time-bound and effective manner, providing employees with a forum to have their concerns addressed.

In the past year, we intensified efforts to enhance our commitment to inclusion by fostering meaningful dialogues, facilitating open conversations, and building a robust foundation for inclusivity. Our focus included celebrating diversity days and running campaigns to raise awareness and actively engage our community. To establish a diverse talent pipeline in the 3PL industry, especially at MLL, we prioritised initiatives to make our workplace appealing to women and individuals with disabilities. Our commitment to being an equal opportunity employer extended to actively seeking talent from the LGBTQ community.

Preparation of a three-year strategic roadmap for IDEA (Inclusion, Diversity, Equity, and Accessibility) meticulously delineated four key pillars, including IDEA Metrics, HR Policy and Processes, Leadership Accountability, and Organisational Involvement and Communication, along with the respective initiatives falling under each of these pillars In our continuous commitment to advancing inclusion, the IDEA Council was established and officially launched in March 2023 The development of IDEA Metrics marked a significant undertaking aimed at crafting comprehensive diversity metrics applicable both at the level of individual business units and across the entire organisation Gender neutral washroom at HO was unveiled to foster inclusion and enhance comfort of various gender identities and expressions. This initiative was extended to five other locations including sites and regional offices We actively participated in the LGBTQIA+ talent recruitment campaign in collaboration with the of functional Tweet Foundation, the Ministry of Social Justice, and In Harmony, known as the Trans Mela initiative. As a result of this initiative, we successfully hired three full-time LGBTQIA+ employees and onboarded two interns

In the first quarter, we proudly introduced two ERGs ality. PRERNA and RAINBOW NETWORK, specifically designed for our women and LGBTQIA+ colleagues, respectively. These ERGs operate with a clearly defined mission, rooted in the perspectives and input from both groups, while staying committed to advancing their causes through tangible action. We tailored various programmes, keeping in mind the importance of awareness creation and sensitisation for gender and other aspects of diversity and inclusion among employees. IDEA sensitisation sessions and circles were conducted to sensitise employees and encourage them to raise their concerns in a safe and open environment.

We take POSH compliance very seriously, and to ensure this, everyone undergoes mandatory training, with sessions conducted at all MLL warehouses and plants. The IC was recently revamped with 50% women appointments. The POSH policy covers harassment against women and also includes our LGBTQ employees and all other gender identities at MLL.

We also conducted women-specific programmes, including sessions on menopause and other health-related subjects. To increase the percentage of women employees in total workforce, we initiated programmes like hiring and grooming female campus recruits for operations. Additionally, we focussed on hiring women leaders in the department head band, resulting in an increase in overall diversity at this leadership band to 18%.

Employee health and wellness are of primary importance, and we worked to optimally manage their welfare. The Swayam initiative, which was launched earlier to drive health and wellness, had a positive impact on employees work-life balance and engagement levels.

We had partnered with an external vendor, Quantum Health Corp, to provide a digitised platform for participation in various health and wellness programmes, thereby creating higher visibility. Online fitness counselling services, fitness challenges, and workout regimens, among others, were designed to drive engagement as well as boost fitness levels. An external agency was empanelled to provide counselling services to employees by trained counsellors, ensuring scores received from these surveys had seen consistent improvement in the last few years. These tangible outcomes inspire us to stay focussed on sustaining the momentum in enhancing employee well-being.

Udaan Second Career Internship Programme ant The programme focussed on enabling women on a career break to continue their work journey at MLL. To achieve this, we partnered with various campuses like SP Jain Institute and Vedika Institute to identify and recruit women returning to work, thereby contributing to our focus on improving our gender diversity.

The emotional and psychological well-being of our employees are paramount to us. In line with this commitment, we introduced InnerSight, an employee assistance programme, that allows all employees to undergo counselling/consulting with professional well-being experts in a non-judgmental and confidential environment. This programme was also extended to cover the immediate family members of employees.

The New Parent Policy was designed to provide comprehensive support and flexibility for those who are navigating their journey of parenthood. This policy reflects a broader perspective, encompassing various parenting scenarios beyond childbirth, such as adoption, surrogacy, or Artificial Reproductive Technology (ART). It makes provisions for parental leave, childcare assistance, and flexible work arrangements, alongside a host of supportive measures tailored to accommodate the diverse needs of new parents.

We remain focussed on developing future women leaders at the operational level by identifying talent with considerable potential and then grooming them as future leaders.

Statements in this Management Discussion and Analysis and in the Annual Report describing our objectives, projections, estimates, expectations, plans or predictions and industry conditions or events are ‘forward-looking statements within the meaning of applicable securities, laws, and regulations. Actual results, performance or achievements could differ materially from those expressed or implied. Several factors could make difference to our operations. These a include economic conditions affecting demand and supply, Government regulations and taxation, natural calamities and so on over which we do not exercise any direct control.